The panel, chaired by British Board of Film Classification president Sir Quentin Thomas, examined only the corporation's UK domestic public service output.

Sir Quentin said: "What the BBC does now is good for the most part - some of it very good.

"But it could and should do better to meet the gold standard which it sets itself in its best programmes."

The report said: "Apart from individual lapses, sometimes of tone, language or attitude, there was little to suggest systematic or deliberate bias.

"On the contrary, there was evidence, in the programming and in other ways, of a commitment to be fair, accurate and impartial."

The report also said: "There is high quality reporting from location, some outstanding current affairs programmes and the website provides much valuable historical and other context."

Bus bombs should be described as terrorist acts, the report decided

But there were gaps in analysis, context and perspective as well as a failure to consistently uphold editorial standards, it continued.

Broadcast news lacked historical background, stories were often not put in the wider context and there was insufficient analysis and interpretation of important events and issues, the report said.

The range of stories and perspectives was too narrow and reporters' use of language was often inconsistent, it decided.

That included the use of the words "terrorism" and "terrorist". The BBC advises its journalists to avoid the latter because it can be "a barrier to understanding".

But the panel said the BBC should use "terrorism" to describe violence against civilians with the intention of causing terror for ideological objectives, "whether perpetrated by state or non-state agencies".

"It seems clear that placing a bomb on a bus used by civilians intending death or injury in supposed furtherance of a cause is a terrorist act and no other expression conveys so tersely and accurately the elements involved."

'Reassuring'

BBC chairman Michael Grade responded to the report by saying the finding of no deliberate or systematic bias was "reassuring".

"The panel found much to praise, but it also identified some shortcomings in the BBC's coverage," he said.

"We have asked BBC management to consider the panel's recommendations and respond to us at our June board meeting."

He added the corporation must continually demonstrate its efforts to meet the highest editorial standards because impartiality was the most important safeguard of the BBC's editorial independence.

We have the right editorial structures and processes in place to provide high quality, impartial journalism

BBC News management

A statement from BBC News management pointed to "recent developments to strengthen performance" such as the appointment of Jeremy Bowen as Middle East editor and a major training programme.

"We are pleased the panel commends the quality and authority of our reporting from the Jerusalem bureau," it said.

"We agree there is more we can do to provide greater context and understanding for audiences on the conflict.

"We are confident we have the right editorial structures and processes in place to provide high quality, impartial journalism and to ensure we continue to make progress in developing the authority and comprehensiveness of our output."

"Their contribution will assist the BBC in providing the best possible news coverage for licence fee payers."

BBC executives will now prepare a plan for the governors detailing how they intend to implement "appropriate recommendations".